THE WEEK OF NOVEMBER 15th IN CRYPTO: Crackdowns, Jordan Peterson, Mt Gox, and Hillary Clinton
By Jasper Hamill
It’s been a rocky week for Bitcoin, which suffered its worst performance in several months amid fears that an avalanche of crypto is about to tumble from Mt Gox. The world’s top cryptocurrency plummeted from a high of about $67,580 to a dismal low of less than $56,900. Ether also took a tumble from $4,818 to less than $3,980, as did most of the main cryptocurrencies.
In fact, the only standout success of the week was the Crypto.com coin, which soared by more than 55% after it was announced that the Staples Center in Los Angeles will be renamed the Crypto.com Arena.
The slump has been blamed on rumors that Mt Gox will soon be forced to repay creditors who lost their deposits when it collapsed in 2014.
Matthew Dibb, chief operating officer at the crypto asset management firm Stack Funds, said: "Those affected will receive a large sum of bitcoin, likely happening in Q1 or Q2 of 2022. This has brought some fear into the market on a longer term horizon,"
So what else has been happening in the world of crypto?
As winter approaches, cold winds are blowing across the crypto sector in some parts of the world.
In Norway, politicians are considering backing a call to ban traditional crypto mining. The proposition was first put forward by Swedish regulators who called on Europe to outlaw proof-of-work mining in order to meet goals set out in the Paris Climate Agreement. Bjørn Arild, minister of regional government and local development, said Norway is “currently considering potential policy measures” and is “looking at the solutions proposed by the Swedish regulators” to address the “challenges related to crypto mining”.
In China, three major crypto news sites went dark amid a growing clampdown. ChainNews, Odaily and Block123 were inaccessible, whilst a top official, Xiao Yi, was banished from the Communist Party for supporting crypto mining companies. “Beijing has driven out most of China’s cryptocurrency mining activities this year in a crackdown that kicked off over the summer,” the South China Post reported.
And in London, England, politicians are trying to get crypto adverts banned from The Tube, the capital city’s underground train system - which famously nixed an ad showing a woman in a bikini.
"My effort to limit these ads is just one aspect of a much wider review of advertising rules on the public transport network, which includes restrictions on adverts by repressive regimes, payday lenders, gambling companies and those that promote an unhealthy body image," said Green Party leader Siân Berry.
Some interesting people and organizations are now dipping their foot in crypto. Like Jordan Peterson, the psychologist and self-help guru that’s basically seen as The Messiah in some testosterone-festooned corners of the internet.
“Bought some more bitcoin,” he tweeted. “Inflation be damned.”
Time Magazine will now hold ether on its balance sheet, which comes after it announced that subscribers have been offered the ability to pay in crypto. And Williston, a tiny city in North Dakota, with roughly 27,000 residents, has installed “the first government-hosted cryptocurrency kiosk” in its airport.
“This is an ambitious step in introducing and engaging the public towards cryptocurrency while proactively playing a role in building the digital ecosystem,” said the city’s finance director, Hercules Cummings. “Although we are a smaller rural community, we are making an impact. Taking this small step may pave the way for other government and commercial entities to follow suit.”
There’s no word on whether travellers from Willison Airport will be able to go “to the moon” after making their investment.
Rocking In The Free World
Closer to home, various politicians have been making strong, ominous statements about crypto. Saule Omarova, President Biden’s nominee to serve as comptroller of the currency, is currently being vetted for this powerful and prestigious position.
During an appearance in front of the Senate Banking Committee on Thursday, Omarova said: “My concern is … we may end up in a situation where a large company like a big tech company might control all of the infrastructure through which the money that every American and every American business uses in their daily moves.”
Omarova was asked about the prospect of Facebook designing a digital currency that overtakes the dollar, requiring national banks to get a franchise from Facebook, rather than a charter.
She added: “This is the scary scenario everyone should take seriously these days.”
Separately, Hilary Clinton also claimed that crypto could “destabilize nations”. Which, it could be argued, is something she knows a bit about.
During a discussion at the Bloomberg New Economy Forum, Hilary said: “One more area that I hope nation-states start paying greater attention to is the rise of cryptocurrency — because what looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential for undermining currencies, for undermining the role of the dollar as the reserve currency, for destabilizing nations, perhaps starting with small ones, but going much larger.”
I wonder what the people of Libya would say was more destabilizing to their nation: Hilary Clinton or cryptocurrencies?
You’ve Got Crypto All Wrong
The Guardian newspaper has a long and illustrious history of telling people what words they can and can’t say. Now it’s waded into a previously obscure debate about the meaning of the word crypto, to remind people that it didn’t always refer to blockchain-based currencies.
“‘Crypto’ for decades has been used as shorthand and as a prefix for things related to cryptography,” Amie Stepanovich, executive director of Silicon Flatirons Center at the University of Colorado Law School told the newspaper. “In fact, in the term cryptocurrency, the prefix crypto refers back to cryptography.”
A Strong Constitution
This week, a crypto group called ConstitutionDAO lost its bid to buy a rare copy of the US constitution at auction. It crowd-funded more than $40 million to “put the constitution in the hands of the people". Sadly, it is now in the hands of an unknown buyer who paid $43.2 million.
All proceeds of the sale will go to the Dorothy Tapper Goldman Foundation - a non-profit group that is committed to “furthering the understanding of our democracy and how the acts of all citizens can make a difference”.
The failure of a crowd-funded bid and the success of a rich individual certainly tell us something about the way the world works, although it might not be the positive message the Foundation would like us to hear.